VeriFone posts Q4 profit

Source: VeriFone

VeriFone Systems (NYSE:PAY), the global leader in secure electronic payment solutions, today announced financial results for the three months and fiscal year ended October 31, 2010.

Net revenues for the three months ended October 31, 2010, were $276 million, compared to $261 million of net revenues in the previous quarter and $218 million for the comparable period of 2009, a 27% year-over-year increase. Net revenues for the full year ended October 31, 2010, were $1,002 million, a 19% increase over the $845 million result for the full year ended October 31, 2009.

Non-GAAP gross margins were 40%, for the three months ended October 31, 2010, compared to 39% in the prior quarter and 38% for the comparable period of 2009. GAAP gross margins for the three months ended October 31, 2010, were 38% compared to 37% in the prior quarter and 35% for the three months ended October 31, 2009. Non-GAAP gross margins were 39% for the full year ended October 31, 2010, and 36% for the full year ended October 31, 2009. GAAP gross margins were 37% for the full year ended October 31, 2010, and 33% for the full year ended October 31, 2009.

Non-GAAP net income per diluted share for the three months ended October 31, 2010, was $0.40, compared to $0.36 in the prior quarter and $0.26 for the comparable period of fiscal 2009, a 54% year-over-year increase. Non-GAAP net income per diluted share for the full year ended October 31, 2010, was $1.32, a 55% increase over the $0.85 figure for the full year ended October 31, 2009.

GAAP net income per diluted share for the three months ended October 31, 2010, was $0.55, compared to $0.21 in the prior quarter and a loss of $0.03 for the comparable period of fiscal 2009. GAAP net income per diluted share for the full year ended October 31, 2010, was $1.13 compared to a loss of $1.86 for the full year ended October 31, 2009.

"In addition to reporting record revenue and profitability for the fourth quarter, we achieved many important financial milestones over the past year," said Douglas G. Bergeron, Chief Executive Officer. "We surpassed the one billion dollar revenue mark and exited the year with non-GAAP gross margins at 40%. Our cash balances reached a record high of $445 million, completing another outstanding year of operating cash flow. As we now set our sights on growing to $2 billion in revenue, we are committed to building the payment industry's most important technology company. We will continue to develop unique services-based offerings while targeting double-digit growth rates and expanding our margin profile," continued Bergeron.

Fourth Quarter Highlights

VeriFone entered into a definitive purchase agreement to acquire Hypercom Corporation. The acquisition, which would help accelerate VeriFone's global expansion in key international markets, is subject to approval by Hypercom shareholders and customary regulatory approvals, and is anticipated to close in the second half of 2011.

VeriFone and Gemalto N.V. entered into a strategic partnership to jointly explore opportunities to accelerate EMV payment adoption, particularly for the U.S. market. VeriFone continues to engage in exclusive discussions to acquire Gemalto's point-of-sale (POS) solutions business and for Gemalto to become VeriFone's preferred machine-to-machine wireless module supplier.

VeriFone and First Data Corporation announced their intent to offer a VeriFone edition of the First Data® TransArmorSM security solution to U.S. multi-lane and petroleum merchants. This will enable businesses using VeriFone's MX 800 series of devices, Secure PumpPay and the Ruby POS solutions to take advantage of a complete security solution combining VeriFone's VeriShield encryption with tokenization technology from RSA, the Security Division of EMC Corporation.

VeriFone partnered with PayPal to expand PayPal payment acceptance in the mobile environment. Upon completion of the planned integration of PayPal payment technology with VeriFone's PAYware Mobile card encryption sleeve for the iPhone, traditional card-based payments using PAYware Mobile will be supported by PayPal acceptance.

Guidance - First Quarter 2011 and Full Year

For the first quarter ending January 31, 2011, VeriFone now expects to report net revenues in the range of $265 million to $270 million. Non-GAAP net income per diluted share is now projected to be in the range of $0.38 to $0.39.

For the full year of fiscal 2011, VeriFone expects net revenues to be in the range of $1,130 million to $1,150 million. Non-GAAP net income per diluted share is expected to be in the range of $1.60 to $1.70, for the same time period.

 

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